361 F. Supp. 3d 358
S.D. Ill.2019Background
- Plaintiff Cheryl Dukes sued NYCERS and its Board after NYCERS denied her application for World Trade Center–related accidental death benefits following the 2007 death of her husband, Ralph Dukes, who worked transporting remains from Ground Zero and later suffered respiratory and other conditions.
- NYCERS Medical Board found Mr. Dukes had COPD but concluded his death was due to diabetes predating 9/11; Medical Board recommended denial and NYCERS issued a denial letter; plaintiff appealed but alleges she was not afforded full review by the Special Trial Committee or Board of Trustees.
- Plaintiff originally sued in the Eastern District of New York (dismissed for lack of diversity), appealed to the Second Circuit (summary affirmance), sought certiorari (denied), then filed in this District; the Second Circuit later vacated a Southern District dismissal and remanded for determination of domicile and jurisdiction.
- On remand plaintiff (now with pro bono counsel) filed an amended complaint asserting: (1) CPLR Article 78 challenge to NYCERS’ denial; (2) breach of contract under Article V, § 7 of the NY Constitution; (3) procedural due process § 1983 claim; and (4) substantive due process § 1983 claim. She invoked diversity jurisdiction (claims exceeding $75,000) and argued she is domiciled in Pennsylvania.
- Defendants moved to dismiss for lack of subject matter jurisdiction (disputing domicile) and for failure to state claims; they also argued federal courts cannot hear CPLR Article 78 claims and that the due process and contract claims fail on the merits.
- Court held plaintiff was domiciled in Pennsylvania (diversity jurisdiction exists), denied dismissal of the CPLR Article 78 and Article V, § 7 breach claims, granted dismissal of procedural due process claim without prejudice, and dismissed substantive due process claim with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction (diversity) — plaintiff domicile | Dukes is domiciled in Pennsylvania (home, PA driver’s license, voter registration, IRS records); amount in controversy > $75,000 | Dukes is domiciled in New York (part-time Staten Island residence, work in NY); thus no diversity | Court found Dukes domiciled in Pennsylvania and diversity jurisdiction exists |
| Federal jurisdiction over CPLR Article 78 claim | Federal court may hear Article 78 claim where diversity jurisdiction exists | Federal courts cannot entertain Article 78 special proceedings (or should decline) | Court held federal courts may hear Article 78 claims in diversity and denied dismissal of that claim |
| Breach of contract under NY Const. Art. V, § 7 | Plaintiff as beneficiary has vested contractual right when member joined NYCERS; Medical Board finding is condition precedent to payment, not to vesting | Defendants say contractual right is unenforceable until Medical Board finds eligibility | Court held plaintiff stated a viable Article V, § 7 breach claim and denied dismissal |
| Procedural and substantive due process (§ 1983) | Procedural: NYCERS’ delays, alleged failure to follow procedures, denial of appeals, misrepresentations, and high denial rates rendered process inadequate. Substantive: deprivation of property interest in benefits | Procedural: many allegations are random/unauthorized acts remedyable by Article 78; delay not so extreme to violate Mathews factors. Substantive: plaintiff lacks conduct showing conscience-shocking behavior | Procedural due process claim dismissed without prejudice (most allegations characterized as random/unauthorized; delay allegations insufficient as pleaded). Substantive due process claim dismissed with prejudice (no conscience-shocking conduct alleged) |
Key Cases Cited
- Makarova v. United States, 201 F.3d 110 (2d Cir. 2000) (plaintiff bears burden to prove subject-matter jurisdiction by a preponderance)
- J.S. ex rel. N.S. v. Attica Cent. Schs., 386 F.3d 107 (2d Cir. 2004) (courts accept factual allegations as true on jurisdictional motions but need not draw all inferences)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions not entitled to assumed truth on a motion to dismiss)
- Mathews v. Eldridge, 424 U.S. 319 (1976) (three-factor balancing test for procedural due process)
- Campo v. N.Y.C. Emps. Ret. Sys., 843 F.2d 96 (2d Cir. 1988) (availability of CPLR Article 78 provides due process for random/unauthorized deprivations)
- Birnbaum v. N.Y. State Teachers' Ret. Sys., 5 N.Y.2d 1 (N.Y. 1958) (Article V, § 7 fixes contractual retirement rights upon membership)
- Kamen v. Am. Tel. & Tel. Co., 791 F.2d 1006 (2d Cir. 1986) (court may consider evidence outside pleadings to resolve jurisdictional facts)